Compound interest is what makes long-term investing powerful: your returns start earning their own returns. Enter a starting amount, a regular monthly contribution, an expected annual rate, and a time horizon to see how your investment could grow.
How It’s Calculated
This calculator assumes monthly compounding: your expected annual return is divided by 12, and your monthly contribution is added at the end of each month. Future Value = Principal × (1 + r)^n + Monthly Contribution × (((1 + r)^n − 1) ÷ r), where r is the monthly rate and n is the number of months.
A Note on Assumptions
This tool projects a constant annual return, which real markets never deliver — actual returns vary year to year. Treat the result as a rough, useful estimate for planning rather than a guarantee, and remember that inflation and taxes aren’t factored in here.
Worked Example
Say you start with $5,000, add $200 every month, and expect a 7% average annual return over 20 years. Plugging those numbers in gives a future value of $124,379.03 — built from $53,000.00 in total contributions and $71,379.03 in compound interest earned on top of them.
FAQ
How often does this calculator compound interest?
It compounds monthly — your annual rate is divided by 12, and any monthly contribution is added at the end of each month.
What happens if I leave the monthly contribution at $0?
The calculator still works — it will project growth on your starting investment alone, with no ongoing contributions.
Does this account for taxes or inflation?
No, it shows nominal growth only. For an inflation-adjusted result, try our Inflation-Adjusted Return Calculator.
Why does a small difference in rate matter so much over time?
Because interest compounds on interest — over 20+ years, even a 1-2 percentage point difference in your assumed rate can change the future value by tens of thousands of dollars.
Where Are Rates Headed Next?
Rates have held steady for months, but that could shift soon. See our analysis of Kevin Warsh’s first Jackson Hole speech as Fed chair and what it could mean for your money.
What This Means
Of the $124,379.03 ending balance in the example above, $53,000.00 is money actually contributed and $71,379.03 is investment growth — more than half the total. That growth-to-contribution ratio tends to get larger the longer the time horizon, which is the practical case for starting early. The 7% return used here is an assumption for illustration, not a guaranteed rate — real markets vary year to year.
How to Use the Compound Interest Calculator
Start with the amount already saved or invested, then add the amount you expect to contribute each month. Enter the annual return as a percentage—for example, enter 4.25 for 4.25%, not 0.0425—and choose the number of years. Select Calculate Growth to see the projected future value, total contributions, and estimated growth.
- Initial Investment: the balance available at the beginning.
- Monthly Contribution: the amount added at the end of each month.
- Expected Annual Return: a constant annual rate used for the projection.
- Number of Years: the full period over which the money compounds.
A Real APY Comparison: 4.25% vs. 4.00%
Suppose you keep $10,000 in an account for one year and make no additional deposits. At 4.25% APY, the balance grows by about $425. At 4.00% APY, it grows by about $400. The one-year difference is only $25 before taxes. Over longer periods, compounding widens the gap, although savings-account APYs can change. See the full balance table, tax example, and fee break-even test in 4.25% APY vs. 4.00% APY: How Much More Does $10,000 Earn?
Common Input Mistakes
- Entering a decimal instead of a percentage: use 7 for 7%, not 0.07.
- Treating a projection as a guarantee: market returns vary, and deposit-account APYs may change.
- Ignoring fees and taxes: the calculator shows growth before account fees and taxes.
- Ignoring inflation: a future dollar may buy less than a dollar today. Use the Inflation-Adjusted Return Calculator for a real-return estimate.
- Using an unrealistic time horizon: select the period the money can actually remain invested or saved.
How to Interpret the Results
Total Contributions is the starting investment plus all monthly deposits. Total Interest Earned is the projected ending balance minus those contributions. Comparing the two helps show whether most of the final balance comes from money you added or from compounding.
Try changing one input at a time. A longer time horizon often has a larger effect than a small rate increase because earlier growth has more time to earn additional growth. Increasing monthly contributions can also be more dependable than assuming a higher return. For savings accounts and CDs, compare APY, fees, withdrawal rules, balance requirements, and deposit-insurance eligibility—not the yield alone.
What the Calculator Does Not Include
This tool does not model changing rates, irregular deposits, withdrawals, investment losses, fees, taxes, or inflation. It assumes a constant rate and end-of-month contributions. Those assumptions make scenarios easy to compare, but they do not predict actual account or market performance.
Official Resources
- Investor.gov Compound Interest Calculator
- Consumer Financial Protection Bureau: Bank Accounts
- FDIC Deposit Insurance Resources
Last reviewed September 18, 2026. For educational purposes only. Results are estimates based on the inputs and assumptions selected and are not financial, tax, or investment advice.